24^hrOnline Forex Trading With Finotec

With a volume of $3 trillion traded each day, the foreign exchange market is the largest financial market in the world. While Forex trading was once the exclusive domain of banks and large financial institutions, the rise of Internet technology has made it accessible to all types of investors including individuals with small investment capital. As word of its substantial and quick potential profits is spreading, online forex trading is becoming more popular each day.

Through online currency brokers such as Finotec, traders can now buy and sell currencies in one mouse click and with no commissions or fees. Online forex trading allows you to take advantage of market fluctuations – even small – in various currency rates. At Finotec, you get free access to topnotch tools which will help you predict market direction and place your orders.

What is Forex Trading?

Forex trading also known as currency trading refers to a series of transactions on foreign exchange markets used by investors for speculative or hedging purposes. A basic forex transaction consists in the simultaneous buying and selling of one currency against another. Currencies are thus traded in pairs (majors or crosses) for instance: the Euro against the US Dollar (EUR/USD) or the British Pound against the US Dollar (GBP/USD). For example, buying the pair EUR/USD at 1.3305 means that you need 1.3305 USD to buy one euro.

Trading forex can also be described as speculating on the direction of one currency against another. You make profit when the market moves in your favor and you lose if the market moves against you. For example, you'll buy EUR/USD if you think that the Euro will strengthen against the US Dollar. Conversely, if you think the Euro will weaken compared to the US Dollar, then you will sell EUR/USD.

Although it may seem easy at first glance, there is much more to forex than meets the eye. Predicting market moves is a complicated matter and that's why Finotec has its own online forex Education Center where you can learn Forex. With Finotec, you may also practice online trading by opening a Forex Demo Account. The simulation platform will allow you to trade with virtual money in real market conditions. Once you have acquired the skills to trade, use our wide range of tools and indicators to make wise and informed decisions for successful online forex trading.

Online Forex Trading Strategies

There are many ways to trade forex. Some traders practice "day trading", which means that they open and close positions in the same day. Some even open positions only for a few minutes. Others prefer to trade over several days, while some make deals over several weeks and even months. Depending on your trading profile, you will build your strategy either according to technical or fundamental analysis or both. Whatever strategy you choose, Finotec has a wide range of tools at your disposal: RSI, Bollinger, MACD, daily reports, and many more.

Leverage and Margin

One of the great advantages of forex trading is that you can benefit from Leverage for increased profits. Currencies are usually traded in lots, with a standard lot being equal to $100,000. Since many individual traders can't usually come up with such large amounts, online brokers offer them the possibility to trade with margin. With margins, traders may enter positions with much greater value that they can afford. The collateral you put down to enter such a position is known as the margin. This margin allows you to create leverage to enter the position. Finotec offers leverage up to 200:1 (0.5% margin). This means that with $5,000, you can buy $1,000,000 worth of currency. As you can see, leverage is a great way to increase your buying power but it's a double-edged sword: it can also lead to substantial loss. For this reason, it is recommended that new traders use low leverage to start off with. Let's say you buy 100,000 EUR/USD with a margin requirement of 1%. This means your used margin (the amount available for loss or opening new positions) is $1,000 while your usable margin is $99,000. If your losses exceed your usable margin, you will either need to add money to your account or you broker will close your position (margin call). When trading with Finotec, you can never lose more than you have deposited in your forex trading account.

Spread

If we take no commissions or fees, then how are we compensated for our brokerage services, might you ask? The answer is: the spread. As you may have noticed, a currency pair quote comes with two displayed rates for instance, GBP/USD 2.025/2.028. Those refer respectively to the bid price (the rate at which you may short sell the pair) and the ask price (the rate at which you may buy the pair). The spread is the difference between those two rates. The tighter the spread, the more advantageous it is for you. Finotec offers spreads as low as 3 pips on the main currency pairs. Finotec is able to offer such tight spreads thanks to the huge capital traded by its clients each day and the excellent inter-bank conditions thus negotiated.

Start Trading Forex

With the Finotec Online Forex Trading Platform, trading forex had never been so easy! At Finotec, we provide you with many resources and tools to help you enhance your skills and trade successfully. Most importantly, Finotec offers you one of the best trading systems available today. You can trade forex in one click and view your open positions any time, in a user-friendly and secure environment. So start trading now!

Example:
You expect a strengthening of the euro against the dollar and you decide to buy $100,000 worth of EUR/USD. Let's assume that you were right and that the rate moves from 1.3540 to 1.3610. It has moved 70 pips. (1.3610-1.3540=0.0070.) In this case, each pip is equal to $10 (please note that the value of one pip varies depending on the transaction size and the currency pair traded).

Your profit: 70 x $10= $700.

EUR/USD (Sell : 1.3537 , Buy: 1.3540 , Amount: 100,000)

Forex trading online has become an investment vehicle of choice for many individual investors. Like any other speculative activity, it involves a certain level of risk (which you can control by setting your own Risk Management policy) but it also allows for huge profits. So don't waste anymore time! Enter the world of forex with Finotec and start investing money for your future and with higher returns!

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